Memecoin factory Pump.fun has spent the past few days selling something that no longer has anything to do with memecoins: futures contracts on Bitcoin and Ethereum, with leverage of up to 40 times. Anyone trading there is no longer moving play money, but a position that can vanish completely on a price step of a few percent.
The launch came without much announcement, and that is the part that concerns you. The interface has stayed the same, the one used until now to buy memecoins in their first minute of trading. Behind it now runs a derivatives exchange whose rules assume a different audience.
Perpetual futures on Bitcoin and Ethereum: this is what Pump.fun launched
Pump.fun has enabled trading in perpetual futures on Bitcoin and Ethereum inside its app. Trade publication Cryptobriefing dates the move to October 16, 2026 and describes it as an entry into the business of leveraged positions. The provider’s product page now carries a market table of its own, with columns for mark price, daily change, funding rate and open interest.
What Pump.fun did not build is just as striking. There is no matching engine of its own, no order book of its own and no settlement of liquidations of its own. All of that comes from an outside exchange, and that has consequences for the question of who is really on the other side of your trade.
40x leverage on Bitcoin, 25x on Ethereum
According to Cryptobriefing, the ceiling is 40 times leverage on Bitcoin and 25 times on Ethereum. The publication gives these figures as the result of its own reporting, without citing a source at the provider; confirmation from Pump.fun itself is not available. Read the numbers as a documented order of magnitude, then, and not as a fee schedule you can take over unchecked.
What 40x leverage means fits into one sentence: you post one fortieth of the position value as collateral. On a $500 stake you move $20,000 in Bitcoin. If the price rises 1 percent, you make $200, which is 40 percent on your stake. If it falls 1 percent, you lose the same $200.
Perpetual futures are futures contracts without an expiry date
A perpetual future, or perp for short, is a futures contract on a price that never expires. Conventional futures have an expiry date on which they settle. The perp has none; the position stays open as long as your collateral holds. To keep the contract price pinned to the real price anyway, market participants pay each other a balancing fee at fixed intervals, the funding rate.
That design is why perps are so widespread in crypto trading, and why retail investors in the EU have a legal framework of their own for them. Licensed providers in Europe may grant retail clients far lower leverage than the 40 times at issue here.
Hyperliquid supplies the order book, Pump.fun only the interface
Technically the trading runs at Hyperliquid, the largest decentralised perp exchange. Cryptobriefing describes the division of labour this way: funding rates and open interest for the Bitcoin and Ethereum contracts come straight from the HyperCore mainnet, and Pump.fun borrows order book and liquidity instead of building a derivatives engine itself.
For holders, that means your order lands in another exchange’s order book. Its liquidation mechanics decide when your position is closed, and its funding rate sets what holding costs. Which providers compete in this market at all, and how they differ on fees and leverage, is set out in our perp DEX comparison.
Builder codes: at most 0.10 percent per order for the referring app
The mechanism that lets an outside app place orders at Hyperliquid and earn from them is called builder codes. Hyperliquid’s developer documentation names two points worth knowing. First, you have to approve the referring app’s fee explicitly, with a signature from your main wallet and a maximum amount that you set. Second, a hard ceiling applies: under the documentation, such a fee on perpetual futures may not exceed 0.10 percent.
That 0.10 percent is the ceiling for the referring app’s share, not the total cost of your trade. Add to that the exchange’s own trading fees and the funding rate. How much the referral at Pump.fun actually takes is not in the documentation; the app sets it when placing the order, and that is precisely why you are the one setting the maximum.
At 40x leverage, 2.5 percent is enough for liquidation
The most important calculation in the whole offering is a division. At 40 times leverage your stake equals 2.5 percent of the position value. Move the price those 2.5 percent against you and the collateral is spent, and the position is closed by force. At 25 times leverage the threshold sits at 4 percent.
Set that next to the market’s daily move: Bitcoin stood at $82,923 on Tuesday evening and travelled between $81,155 and $83,249 within 24 hours, a range of roughly 2.6 percent (according to CoinGecko, as of Tuesday 22:00). A single ordinary trading range is therefore enough to end a position at 40 times leverage, and it does so even when the price afterwards returns to where it came from. Ethereum sat at $2,456.46 at the same time, with a daily range of $2,374.52 to $2,471.63.
Liquidation is the built-in normal case at high leverage, not a special case you can prepare for. A quiet Tuesday is enough; no crash is needed.
The funding rate falls due at fixed intervals
The funding rate is the running price of your position. If the contract price sits above spot, holders of long positions pay the other side; below spot, the flow reverses. The payment repeats at fixed intervals as long as the position is open. On a position you hold for weeks, this fee can eat the return even when the price moves your way.
This is the item beginners overlook most often. Leverage decides how fast a position dies; the funding rate decides what it costs day to day. Both numbers sit at Pump.fun in the same market table as the mark price.
PUMP at $0.004762, 7.78 percent above the previous day
The platform’s token has reacted to the news. PUMP quoted at $0.004762 on Tuesday evening, 7.78 percent higher than 24 hours earlier (according to CoinGecko, as of Tuesday 22:00). Market value comes to around $2.20 billion, turnover over the past 24 hours to about $182 million. That puts PUMP 50th among the largest crypto assets.
The day’s gain conceals a weak week, however. Over seven days PUMP is down 5.25 percent.
The week in the PUMP price: $0.003873 at the low, $0.005089 at the high
The weekly path shows a clear dip in the middle. The weekly high came on October 14 at $0.005089, the weekly low on October 18 at $0.003873. cryptoticker.io compiled this reading of the past seven days’ price series itself on October 20, 2026, on the basis of CoinGecko’s daily data. From the low the price has recovered by almost 23 percent up to Tuesday evening, but still sits a good 6 percent below the weekly high.
The perp launch therefore fell into the recovery phase after the weekly low. That the two coincide in time proves no connection: the whole crypto market gained on Monday and Tuesday, and Hyperliquid itself rose 2.95 percent within 24 hours to $81.18.
On the business model behind it: Pump.fun uses part of its revenue to buy back its own token. How that revenue developed in early October, we wrote up on October 10, 2026 in our piece on the turnover behind the buyback. Perp trading gives the platform an additional source of fees and feeds into exactly that calculation.
Pump.fun has no MiCA licence for the EU market
Here lies the point that weighs heaviest if you are in Germany. Since the MiCA transition period ended on July 1, 2026, a provider may offer crypto services in the EU only with an authorisation as a crypto-asset service provider. Pump.fun holds no such authorisation, and nor does Hyperliquid as a decentralised exchange. What such an authorisation demands of a company is set out in our overview of the MiCA obligations for crypto firms.
In practice you trade without the protections an authorised provider owes you. There is no segregated custody of your funds under European law, no route of complaint to a German supervisor and no compensation rule if the platform fails. The European leverage caps for retail clients do not bite here, and that is exactly why 40 times leverage is possible at all. If you want leveraged exposure and a regulated route to it, that route runs through an authorised crypto broker with far tighter leverage caps.
There is also a plain question of access. According to the reporting on the launch, leveraged trading is barred for users in the United States and further territories. Whether and how long access from Germany stays open is the provider’s decision, not yours. A block can come at any time, and it hits open positions.
Perpetual futures and the holding period: two separate tax worlds
Buy Bitcoin and hold it longer than a year, and under current German law the gain is tax-free on sale. This one-year holding period under section 23 of the German Income Tax Act applies to the private disposal of the crypto asset itself.
A perpetual future is not a crypto asset but a forward transaction. The holding period therefore does not apply, and neither does the expectation of being tax-free after a year. Gains and losses from forward transactions are treated differently from a direct purchase, and losses carry offsetting rules of their own. This is no detail at the margin, because it changes the arithmetic behind a position fundamentally. How to document perp trades cleanly, and which tools prepare the data for a tax return, is shown in our comparison of crypto tax tools. Have a tax adviser check how your own trades are classified before you take positions of this size.
Levels above and below
As points of observation, not as price targets: above, the next level is the weekly high of $0.005089 from October 14, and beyond it the round $0.0055. Below, the weekly low of $0.003873 from October 18 is the reference, with the daily low of $0.004334 in between. As long as the price holds above the daily low, the recovery of the past two days stands; beneath it, the move since October 18 would be given back.
What the perp launch is worth to the platform will show not in one day’s price but in the open interest of the two contracts. If it stays small, it was a headline. If it grows, the stream of fees grows with it, and so does the basis for the buybacks.
Pump.fun perps: without a MiCA licence you carry every risk yourself
The offering is new, the leverage is high, and the legal protection is missing. Three steps that clear up the situation for you:
- Work out the liquidation threshold before you open a position. Divide 100 by the leverage: 40 times leverage means 2.5 percent, 25 times means 4 percent. Compare the result with the market’s ordinary daily range, which for Bitcoin on Tuesday came to around 2.6 percent. Which providers set which leverage tiers and fees is in the perp DEX comparison.
- Decide deliberately between unregulated and authorised. At Pump.fun and Hyperliquid there is no MiCA authorisation, no segregated custody under EU law and no route of complaint to a German supervisor. If that goes too far for you, the route through an authorised broker with tighter leverage caps remains.
- Keep forward transactions apart from your long-term holdings. Perps do not fall under the one-year holding period. Keep them separate in your books from coins you hold for years, so that you do not destroy the holding period by accident. The tax tool comparison shows which software reports forward transactions cleanly.
(As of October 20, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)
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